Market Critical of Sebi's Settlement Process

The Securities and Exchange Board of India's settlement mechanism, designed to offer a faster route to resolving securities law violations over longdrawn court proceedings, is facing mounting criticism over growing delays and perceived discretionary practices.

- Neha Joshi

Intended to streamline enforcement and reduce litigation, the process is increasingly marred by inflated settlement amounts and stringent non-monetary terms, say experts.

Data from Sebi's website reveals a significant surge in settlement amounts collected in 2024-25, reaching ₹851 crore as of 15 March—a sharp increase from the ₹125 crore collected in FY23 and ₹94 crore in FY24.

Even excluding a ₹643-crore settlement in a case involving the National Stock Exchange, its former chief executive Vikram Limaye, and former chief technology officer Umesh Jain, Sebi's collection in FY25 is considerably higher than in the previous two financial years.

To be sure, Sebi may also have been handling a backlog of settlement cases that have been piling up. While data for FY25 is not yet publicly available, the number of pending applications at the end of FY24 had increased to 289 from 137 at the end of FY23, according to Sebi data that Mint has reviewed. The number of new applications increased to 434 in FY24 from 386 in the year before.